TORONTO, March 1 (Reuters) - The Canadian dollar pared early
losses and traded stronger on Friday after domestic economic
growth data for December and the fourth quarter came out in line
with forecasts.

The Canadian economy chalked up another quarter of weak
growth at the end of 2012, and shrank 0.2 percent in December
for its first monthly decline since February 2012.

But given that economists have sharply lowered their
expectations in recent weeks after a string of dour data, the
currency actually strengthened slightly after the numbers.

"There may have been some players that were bracing for an
even worse number than this and the possibility of a slight
decline," said Paul Ferley, assistant chief economist at Royal
Bank of Canada.

"That didn't happen, so that may be contributing to a bit of
a bounce. But I wouldn't think the reaction will be all that
long lived as the number just seems too close to expectations."
Continued...